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Some Americans could see their insurance bills double next year

By Tom MurphyThe Associated Press

Posted:
03/14/2013 12:01:00 AM MDT

Yolanda Hormilla, a nurse who works for Florida Blue, checks Jose Ballivian's blood pressure last year in the company's sales office in Sunrise, Fla. Some Americans could see their insurance costs double this year as the U.S. health care overhaul expands coverage to millions of people. (Associated Press file)

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Some Americans could see their insurance bills double next year as the health care overhaul law expands coverage to millions of people.

The nation's big health insurers say they expect premiums — or the cost for insurance coverage — to rise between 20 and 100 percent for millions of people due to changes that will occur when key provisions of the Affordable Care Act roll out in January.

Mark Bertolini, chief executive of Aetna Inc., one of the nation's largest insurers, calls the price hikes "premium rate shock."

"We've done all the math, we've shared it with all the regulators, we've shared it with all the people in Washington that need to see it, and I think it's a big concern," Bertolini said during the company's annual meeting with investors in December.

A file photo of a stethoscope. (The Denver Post, Jupiter Images)

While the rate hikes will impact roughly 14 million people who buy their own insurance, Denver experts predict the impact will be less on medium and large businesses offering employer-sponsored plans.

"Will it still be a shock? Of course. But we haven't had any clients say, 'I'm out, I can't play,' " said Cathy Sims, vice president of employee benefits for IMA, a retail insurance broker. "The interesting thing is that people are in a wait-and-see mode."

To be sure, there will be no across-the-board rate hikes for everyone, and there's no reliable national data on how many people could see increases. But the biggest price hikes are expected to hit a group that represents a relatively small slice of the insured population.

According to Bill Lindsay, president of Lockton Benefit Group in Denver, there are four market segments in the U.S. today — the two smallest he expects will be hit the hardest.

"When we talk about this kind of rate increase, we are talking about the individual market and the small employer (of fewer than 50 people)," he said.

One option that companies may entertain would be to self-fund their insurance, which each company will need to assess and prepare for the risk and cost uncertainty of that option.

"We've been talking clients through why self-funding could protect them next year and what that would look like with them," Sims said. "They certainly need to be ready for some volatility of cost on a month-to-month basis and even some higher costs some years."

The price increases are a downside of President Barack Obama's health care law, which is expected to expand coverage to nearly 30 million uninsured people.

Other price hikes will vary due to factors such as a person's current coverage and age.

While insurers forecast instant premiums hikes starting in January, the overhaul also is expected to tame health care costs for many.

Starting next year, the law will require insurers to cover everyone who applies. That means health care costs could fall dramatically for people who have been unable to find coverage due to a chronic condition.

There also will be tax credits, or subsidies, given to people with incomes that fall within 400 percent of the federal poverty level. For 2013, 400 percent of the poverty level for all states except Alaska and Hawaii would be $94,200.